This comes three weeks after the Nepal banned the use of Indian currency notes higher than 100 denomination.

Additionally, the NRB has also requested the RBI to provide exchange facility of more than Rs 78 million Indian currency notes of INR 500 and INR 1,000 denominations that remain with Nepal's central bank after India demonetised the notes in 2016.

“Due to lack of exchange facility for high-denomination Indian currency, the country’s hospitality sector has been affected. Similarly, Indian tourists are also discouraged due to the lack of this exchange facility,” the report quoted Bhisma Raj Dhungana, the executive director of NRB.

Indian currency notes are commonly used in Nepal by individuals and business establishments.

The 2016 demonetisation of Rs 500 and Rs 1,000 Indian currency notes adversely affected Nepal and large amount of the useless notes were stuck in the country. The Nepal government had said it would take up the matter with India.